Time to Restore America’s Economic Freedom
Anthony B. Kim
Economic freedom is a critical element of life that transcends the market. As a vital linchpin in creating a society that values and advances opportunity and personal empowerment, economic freedom is a valuable end as well as a critical means for progress.
Indeed, the free-market economy is more than just an arrangement of voluntary economic relationships. It is the proven source of dynamic growth and upward social mobility, reinforced by the fundamental principles of economic freedom — empowerment of the individual, equality before the law, and open competition. These fundamental principles not only help underwrite societal progress, but also help achieve the broad-based economic dynamism that ultimately ensures overall well-being for individuals and society as a whole.
As documented in the Index of Economic Freedom, an annual study that benchmarks the quality and attractiveness of the entrepreneurial framework across countries, economic freedom around the world has advanced measurably over the past two decades, thanks in large part to the historical record of the United States in promoting and defending freedom. Yet the recent record of the United States in the Index — the undeniable trail of declining economic freedom — is a serious cause for alarm.
According to the latest edition of the Index, the downward spiral in U.S. economic freedom since 2008 has come to a halt, but the downward trend in overall economic freedom over the past five years reflects broad-based deteriorations in key policy areas. Increased tax and regulatory burdens, aggravated by favoritism toward entrenched interests, have undercut America’s historically dynamic entrepreneurial growth and confined the U.S. economy to the rank of only “mostly free.”
There is no doubt that America’s dwindling economic freedom has a human toll. Families, businesses, and community organizations across America — what the 18th-century philosopher Edmund Burke dubbed the “little platoons” of society — have been squeezed by the government’s assault on America’s economic freedom. Despite the ongoing recovery, the economic damage has been extensive. Its legacy includes subpar growth, mediocre business investment, and fewer job prospects — particularly for the poor and less skilled.
This is the current status of the nation, and there is no use in denying it. However, it is critical that we understand that the economic reality America confronts is neither a statement of fate nor a forecast. The future is open to recovery. Crafting a better economic future will necessitate a return to conservative ideas based on the enduring principles of limited government, individual freedom with responsibility, and free enterprise.
At the core of this critical task lies the importance of understanding that economic and cultural factors are inextricably interwoven. Opportunities generated by policies advancing economic freedom often influence an individual’s prospects for the future. In turn, the future includes a community or family in the context of which individuals make decisions. The culture of family and community also surely affects the extent to which individuals take advantage of their opportunities. As the late William E. Simon, former Treasury Secretary and a staunch advocate of liberty, once noted:
[T]he true concept of economic freedom must be understood to be far deeper and richer than the mere absence of restraint, or the license to do as one pleases. The only defensible kind of economic freedom is freedom coupled with a sense of moral responsibility to one’s community and country, to the values that bind us.
Fortunately, the greater calling for conservative solutions on many policy fronts in recent years points to new hope for revitalizing America’s economic freedom. That work will surely entail the rise of a new generation of conservative leaders willing to relearn the crucial linkage among economic freedom, personal responsibility, opportunity, and empowerment. Analyzing cultural, social, and economic trends through the annual Index of Culture and Opportunity is a critical first step toward inspiring the resolve to get America back on track and reinvigorate the free-market dynamism that ensures opportunity for all but favoritism to none. Now is the time to rebuild America’s principled policy toolkit.
— Anthony B. Kim is Research Manager of the Index of Economic Freedom and Senior Policy Analyst for Economic Freedom in the Center for Trade and Economics, of the Institute for Economic Freedom and Opportunity, at The Heritage Foundation.
Next Up in the Index:
The 2015 Index of Economic Freedom http://www.heritage.org/index/
- Terry Miller and Anthony B. Kim, 2015 Index of Economic Freedom (Washington: The Heritage Foundation and Dow Jones & Company, Inc., 2015), http://www.heritage.org/index/.
- William E. Simon, “The Morality Of Economic Freedom,” National Review, November 5, 1990, pp. 54–55.
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